Insurance regulator IRDAI has mooted sale of motor third party cover at pollution check centres, starting with those in Telangana.
Apart from relaxing certain agency norms to facilitate distribution of simple insurance policies such as motor third party through the facilities, the Insurance Regulatory and Development Authority of India has also written to the governments on sharing of motor vehicle data.
As IRDAI is located in Hyderabad, it wants to roll out the project first in Telangana. A couple of days ago, it wrote to the State Transport Department about the proposal and on the need to share vehicle data on a real-time basis with the pollution control centres.
Post the launch in Telangana, the sale of motor third party insurance cover would be extended across the country, says IRDAI Executive Director Sriram Taranikanti.
The IRDAI, which had earlier considered sale of motor vehicle insurance through ATMs, is more optimistic of better response from motorists as vehicles are required to obtain pollution-under-control certificates every six months. The sale through ATMs also faced technical barriers, especially in view of the alphanumeric set of numbers that need to be punched and the limitations of completing the purchase within a short timeframe.
The decision on roping in the facilities that certify the tailpipe emission levels as a new sales channel is part of the efforts to improve penetration of the insurance cover. Though mandatory under the Motor Vehicles Act, studies show that a large number of vehicles plying on the road have not taken third party insurance cover.
New vehicles automatically get the insurance cover, in addition to the own damage policy, at the time of purchase and registration. The same is not the case afterwards with several owners not renewing the third party insurance that serves as a mechanism for victims of accidents involving the vehicle to get compensation.
Mr. Taranikanti says the violation is not just a regulatory issue, but also has a social angle. A road accident victim stands to get a relatively higher compensation in case of a third party cover. Whereas victims are only eligible for Rs. 25,000 (as in hit-and-run cases) in accidents caused by vehicles without third party insurance policy.
The cost of the insurance cover is fixed and small compared to the own damage policy. For two-wheelers, it ranges from Rs. 569 (below 75 cc) to Rs. 796 (above 350 cc), while for cars is it from Rs. 2,055 (below 1,000 cc) to Rs. 6,164 (above 1,500 cc).
For simple insurance policies
IRDAI wants to roll out the project first in Telangana
The sale of motor third party insurance cover to be extended across the country soon after its launch in TS
